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OCBC Q2 net profit up 54% on-year, beating estimates

The bank on Tuesday posted a net profit of S$921 million for the second quarter, up from S$597 million for the same period last year.

SINGAPORE: Oversea-Chinese Banking Corp (OCBC), Singapore's second-biggest lender, posted a better-than-expected 54 per cent rise in net profit for the second quarter, helped by strong loans growth and increased contributions from insurance arm Great Eastern.

The bank earned S$921 million for the quarter, up from S$597 million for the same period last year and exceeding the S$796 million average forecast of six analysts polled by Reuters.

Its second quarter net profit also beat the S$808 million reported by United Overseas Bank (UOB) for the quarter but lagged the S$969 million achieved by DBS, Singapore's and Southeast Asia's largest banking group.

Customer loans rose 12 per cent year-on-year to S$177 billion, growing across all key customer segments and geographies. Profit from life assurance for the quarter was S$220 million, significantly higher compared with S$16 million in the same period last year.

OCBC's net interest income climbed 17 per cent from S$961 million a year ago to a record S$1.13 billion, while non-interest income rose 40 per cent to S$850 million from S$606 million. Net trading income in the second quarter rose 48 per cent from the previous year to S$133 million, while dividend income grew 53 per cent to S$56 million.

Looking ahead, OCBC CEO Samuel Tsien said the successful takeover of Hong Kong's Wing Hang Bank last month will allow OCBC to better tap the significant cross-border business arising from the growing regional trade, investment, capital and wealth flows between Greater China and South East Asia.

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